Google free to extend web search lead as U.S. FTC ends probe

Google Inc. is free to extend its dominance of the $50 billion Internet-search market after U.S. regulators ended an investigation into whether the company unfairly disadvantaged competing websites by favoring its own services in search results.

The Federal Trade Commission, after a 20-month antitrust probe, concluded Google was motivated more by wanting to improve its search results and the user’s experience than by a desire to stifle competition, said Chairman Jon Leibowitz, who drew a distinction between dominating a market and doing so unfairly.

The FTC’s decision clears the way for Google to continue adding features that have helped it beat back Microsoft Corp. and Yahoo! Inc. to become the world’s top search provider and most valuable Internet company.

“Nothing in the decision is a serious blow to any of Google’s ambitions,” Whit Andrews, an analyst for technology research firm Gartner Inc., said in an interview. The FTC didn’t get into the question of “where the boundaries are going to get drawn” in the search business, he said.

Google, which makes money by selling advertising next to search results, should grab 76 percent of the U.S. search market this year, up from 75 percent last year. Microsoft should get 9 percent while Yahoo may land 6 percent, according to EMarketer Inc.

The global Internet search market is expected to grow to more than $50 billion this year, up 15 percent from the year-ago period, ZenithOptimedia, an advertising research unit of Paris based Publicis Groupe SA, said in a report last year.

Manipulating Searches

The FTC investigation looked into allegations that Google manipulated its search algorithms to promote its own products and services, harming competitors and consumers. While some evidence suggested Google was trying to eliminate competition, its “primary reason” for changing the look and feel of search results was to improve user experience, Leibowitz said at a news conference in Washington yesterday.

The agency’s decision to close its probe without enforcement action is a blow to competitors including Microsoft, Yelp Inc., and Expedia Inc.. An alliance of e-commerce and Web- search companies pressed the agency to bring an antitrust lawsuit.